First and foremost, the government needs to focus more on arresting the galloping food inflation to give common people some relief from the consequent sufferings
The high rate of inflation at over 9.0 per cent the economy has been witnessing during the past six months has not shown any sign of easing of late. The latest official data on the overall inflation and the consumer price index as published by the Bangladesh Bureau of Statistics (BBS) on Sunday, September 10 only provide in figures what the public are experiencing day-to-day. The food price inflation, for instance, rose to 12.54 per cent in August, the highest ever in the last 12 years. As a corollary, it has left its impact on the average inflation by way of pushing it up by 23 basis points (one basis point being equal to 0.01 per cent) to 9.92 per cent last month (August) from 9.69 per cent in July. The public is experiencing the pressure it has left on the general price levels, not just on foods. It may be recalled at this point that in May this year the inflation rate was the highest in a decade at 9.94 per cent. Amid such not-so-reassuring developments all around, the report that the non-food inflation has come down to 7.95 per cent in August from its peak at 9.57 per cent in May last is cold comfort to the common people.
It all takes one again to the question that the average person often asks: why are the prices of essential goods, foods in particular, going up uncontrollably here in Bangladesh, though in the international market the picture is quite different? Even the UN's Food and Agricultural Organisation (FAO) early this month reported that the prices of staples had recorded a two-year low last month. Since March 2022, when the food prices on FAO's index, which recorded its highest ever in the wake of the Russo-Ukraine war, fell by 24 per cent last August. So, the excuse of the international commodity market's volatility as often offered by the traders to justify their price hike, too, does not hold water.
It is indeed disappointing at a time when Sri Lanka, whose economy went into a free fall a year ago with its inflation rate at 69.8 per cent, has by now managed to bring it down to as low as 4.0 per cent in August. Also other countries including neighbouring India and even advanced economies of Europe and North America have been able to bring down their food inflation rates markedly from their peaks in mid-2022.
So far as the irrational essential market is concerned, some economists would like to blame it on the manipulative trading syndicates on the grounds that, going by the government-supplied data, there should be no essentials supply shortage in the country. Others would point to the internal economic instability and lack of effective market management not only of the essential commodities, but also of the foreign exchange and money supply. Many believe, without tinkering in the name of managing, the relevant authority should rather let the market operate on its own to settle issues like exchange rate fluctuation. In that case the vested interest groups would be powerless to influence essential market negatively, they argue. Under the circumstances, first and foremost, the government needs to focus more on arresting the galloping food inflation to give common people some relief from the consequent sufferings. To that end, it may consider using policy tools that helped neighbouring countries in containing inflation.